Two massive changes initiated recently by regulatory bodies have rocked the real estate industry, altering diametrically the manner of their functioning, raising in the process plenty of confusion regarding their implementation as well as compliance, what it means for both buyers and developers.
The GST and RERA that was recently notified by the Karnataka government have proved to be a cause for concern, the ambiguities especially in the notification of RERA leading to the belief that it favours the builder community at the expense of the interests of buyers.
While concerns and confusion prevail aplenty, the indisputable fact remains that RERA will bring the much needed transparency into the real estate segment besides forcing builders to follow processes that meet the interests of buyers.
While that remains, the burning questions that demand clarification are: to what extent is the developer held accountable? What projects fall outside the purview of RERA? What will be the impact of RERA on existing as well as upcoming projects?
Admitting that the ambiguity in the notification has caused confusion regarding its implementation as well as to what comes under its ambit, Ashish Puravankara, President, CREDAI-Bengaluru, stated that the RERA notification makes a balancing act between the buyer and promoter, keeping in perspective the interests of current as well as future home buyers. “Exemptions for projects in terms of registration with the regulatory authorities have been clearly done only based on the completed status, which is very much in line with the Act.”
To stress his point, he referred to the exemptions given in the notification to projects that have completed 60 per cent execution of sale deeds. “Sale deeds are executed only after the project is completed. Similarly, maintenance of common areas in apartments is handed over to the residents’ associations only after the project is fully completed and mostly occupied too. Exemption to such projects is very much in tune with the Act.”
Puravankara extended the same logic for the exemption of layouts that have handed over charge of civic infrastructure to the local authorities “as such handing over happens only after full completion of the project.”
The government notification also exempts projects that have applied for occupancy certificate (OC). “This again is in line with the Act as OC is applied only after the project is completed, all civic infrastructure is in place and the units are ready to occupy”, stated Puravankara. In the case of projects that have received partial OC, the notification gives exemption only to that phase which has received the OC.
Plot area
However, a sore point that Puravankara picked in the notification was the threshold applied for RERA compliance.
“The threshold of the plot area coming under the purview of the Act has been kept at 500 sq. m. This should have been lowered to 100 to 150 sq. m as most deviations happen in this segment and these go unaccounted.”
NANDHINI SUNDAR
(Continued on Page 3...)
